Erie County's $90 Million Problem Starts With the Tax Breaks Nobody Talks About

Disclosure: This analysis was conducted by Zach Beaudoin, a data researcher and candidate for Erie County Legislature, District 11. All findings are derived from public records; methodology is documented at the bottom of this page and at /methodology/.

Erie County faces a $90 million budget deficit. The county executive is looking at service cuts. Legislators are debating what to trim. But buried in the county’s own financial records is a number that should change the entire conversation: $266.8 million in school property tax exemptions granted by the county’s six Industrial Development Agencies — money that was supposed to be on the tax rolls, funding classrooms.

That’s $710 per household, every year, shifted from corporations onto homeowners and school districts.

An analysis of public records — IDA project data, Comptroller audits, and campaign finance filings — documents a system that has approved virtually every project that applies and has not recaptured public funds when companies fail to deliver on their job-creation commitments.

The school districts paying the price

Erie County has 26 school districts affected by IDA tax exemptions. The impact is not evenly distributed.

Williamsville Central — one of the county’s largest districts, serving 9,494 students — has lost $14.8 million in school property tax revenue to 268 IDA projects. That’s $1,562 per pupil that the district has to make up through higher taxes on homeowners or cuts to programs. A single pipeline project, Empire State Pipeline, accounts for nearly $6 million of that exemption — while donating just $1,000 to political campaigns.

Lancaster Central lost $5.3 million across 269 projects. Frontier Central lost $4.2 million. Sweet Home lost $3 million. West Seneca lost $2.2 million.

The revenue loss figures represent school property tax exemptions that districts must offset through higher homeowner taxes, reduced programming, or both.

A system that never says no

In 2017, the New York State Comptroller audited the Erie County IDA. What they found should have been a scandal: the agency had approved 100 percent of the 30 projects reviewed during the audit period — every single one. The board had no formal evaluation criteria. Members relied on what the auditors called “collective personal knowledge” to justify millions in tax breaks.

Of the 32 project owners reviewed, 14 failed to meet their job creation goals — a shortfall of 367 jobs. The ECIDA never recaptured a single dollar of financial assistance. It never terminated a single project.

The Comptroller’s audit concluded the agency lacked the criteria needed to evaluate whether tax breaks were warranted and had not used available enforcement tools when companies missed their commitments.

Who benefits

The pattern becomes clearer when you look at who’s giving and who’s getting.

Forty percent of Erie County IDA beneficiaries also donated to political campaigns — more than three times the 13 percent baseline donation rate for New York businesses generally, based on Census County Business Patterns data. The county’s pay-to-play score — a metric combining donor rates, exemption concentration, and governance overlap — ranks it 26th out of New York’s 104 IDAs.

Harris Beach PLLC, the law firm that serves as ECIDA general counsel, earned an estimated $3.7 to $4.9 million from the agency between 2017 and 2022. During the same period, partners at the firm contributed $79,850 to committees affiliated with the officials who appoint the board it advises. The firm’s fees are paid by the applicant companies, not the agency — meaning the firm earns revenue only when projects are approved. The agency’s own PARIS procurement filings show $472,525 in payments over the same period; the remaining estimated $3.2–4.4 million was paid directly by applicant companies and does not appear in agency procurement records, a gap that results from how IDA counsel fees are structured rather than from disclosure requirements specific to this firm.

Mark Poloncarz, who during his 2011 county executive campaign called the Harris Beach arrangement “pay to play at its base level,” retained the firm after winning office. It has served continuously under both Republican and Democratic administrations. The donations simply redirected to the new power holders.

The bipartisan machine

This isn’t a Republican problem or a Democratic problem. It’s a structural one.

When Erie County transitioned from Republican Chris Collins to Democrat Mark Poloncarz, Harris Beach kept the ECIDA counsel contract and redirected its campaign contributions. Benderson Development, the county’s largest private developer, donates to candidates of both parties. Carl Paladino, whose Ellicott Development holds $9.5 million in property tax exemptions through a network of 147 shell entities at 295 Main Street, directed 40 percent of his $1.3 million in political donations to Democrats between 2000 and 2010.

The same developers fund both sides. The same law firms advise both administrations. The same families — the Feroletos, the Vaccos, the Lorigos — hold positions spanning the IDA boards, the judiciary, and elected office simultaneously, a pattern documented in public board rosters and NYSBOE contribution records.

Neither party has an incentive to reform a system that benefits whoever holds power.

What this means for the budget deficit

Erie County’s $90 million deficit didn’t appear overnight. For years, the county has been giving away its tax base — $340.9 million in total property tax exemptions, $193.8 million net after partial PILOT payments come back — while the costs of running schools, maintaining roads, and providing services kept rising.

State legislation that would prohibit IDAs from abating school tax revenue — Senate Bill S89 — has failed to clear committee for three consecutive years. A bill prohibiting elected officials from serving on IDA boards has gone nowhere.

The public record documents the scale of the exemptions, the absence of enforcement, and the concentration of benefits. Senate Bill S89, which would prohibit IDAs from abating school tax revenue, has failed to clear committee for three consecutive years. Whether that record prompts a legislative response is a question for elected officials and the constituents they represent.

All findings are derived from public records: New York State Authority Budget Office IDA project reports (34,348 projects), NYS Board of Elections campaign contributions (12.49 million records), NYS Comptroller audit S9-15-70, NYS Department of State corporate filings, and PARIS procurement data. Full methodology.

Zach Beaudoin is a data researcher and candidate for Erie County Legislature, District 11. See disclosure at top of page.